New study calls the NHL a ‘cartel’ limiting Canadian pro franchises

By Bill Mann

In Canada, it could be argued, many voters care far more about hockey than about national politics. And not surprisingly, as they are this spring, the two are often intertwined.

Getting a new stadium — and an NHL team — in Quebec City, where the Nordiques (now the Colorado Avalanche) once played until leaving 16 years ago, has become an issue in the national election campaign currently underway. Canadian federal elections are May 2.

In a related matter, a new University of Toronto study released this week might well become a part of the election debate. It claims the National Hockey League is a cartel, saying that Canada could financially support twice the number of teams it has now (six) and that the NHL’s dogged insistence that hockey expand into southern U.S. markets is depriving Canadian fans and local economies.

The NHL playoffs begin today, raising the intensity of play on the ice — and in Canadian politics — to a whole new level. The initial puck-drop of the Stanley Cup playoffs coincides with the second national political debate (this one in French) which also takes place today. There’s a good chance that Gilles Duceppe, the leader of one of Canada’s four major parties, the separatist-minded Bloc Quebecois, will bring up the fact during the French-language debate that Canadian Prime Minister Stephen Harper has stated flatly that Ottawa won’t chip in funds to help build a proposed new $400 million arena/amphitheatre that’s a prerequisite to lure a sought-after NHL team back to Quebec City.

Liberal leader Michael Ignatieff, on the other hand, the most likely candidate to take Harper’s job, has thrown what one Canadian press report calls “a political Hail Mary pass,” hinting recently that the Liberals might support the arena financially — despite the fact that polls show most English-speaking Canadians would oppose federal money going to a Quebec arena/amphitheatre.

It’s all about votes and seats in Parliament. Although the Bloc has the majority of federal delegates from the province of Quebec, the Liberals and Harper’s Conservatives also hold seats there, mostly in Montreal. Those seats could determine who becomes Prime Minister in May.

There are currently six Canadian teams in the NHL (only two of them, the Montreal Canadiens and Vancouver Canucks, are in the postseason), and, the new study says, Canada could easily support a dozen, with two more joining the Toronto Maple Leafs in southern Ontario.

Fifteen years ago, Canada lost a second NHL franchise, the Winnipeg Jets, to the U.S. The team became the Phoenix Coyotes after moving to a desert in which hockey had never exactly flourished. Several U.S. NHL franchises are currently struggling and may relocate.

Because of all this, NHL commissioner Gary Bettman, who directed the moves of the two Canadian NHL teams, has never been a popular man in Canada.

The new study, co-authored by Tony Keller, a fellow at the U of T’s Mowat Center for Policy Innovation, has gotten a lot of attention in the Canadian media. He told the Canadian Press:

“Under the strict legal definition, the NHL is a cartel. It’s a group of businesses that co-operate for the purposes of reducing competition. That’s what they do.”

Keller argues that while the bulk of hockey’s financial support comes from Canada, the NHL continues to push a failed policy of expansion into southern U.S. markets ambivalent to the game, such as Phoenix, Nashville and Florida.

“It’s a very odd situation where the NHL generates about a third of its revenues in Canada, but only about a fifth of its teams in Canada,” Keller told CBC News.

The NHL has resisted recent attempts to move U.S. teams to Canadian cities, something Keller ominously suggests may violate Canada’s Competition Act.